Promise

The “Kalamazoo Promise” offers full tuition scholarships to Michigan public colleges for students who go through the Kalamazoo public schools. The generosity of the Kalamazoo donors who fund the program has inspired other donors around the nation to support local versions of the “Promise.” Michael LeGower and Randall Walsh ask how well the program works…and for who it works.

The first thing that happens following announcement of a Promise program is that public school enrollment rises. Good news, as this is exactly one of the intended outcomes. Interestingly, the most immediate effect is on K-4 enrollment. Since Promise programs typically scale benefits to the length of time a student spends in the district’s schools, parents of young children have the most to gain from the Promise program and respond accordingly.

Some Promise programs impose grade point or other requirements to receive a scholarship, others don’t. (The Kalamazoo original has no such requirements.) The authors find a side effect in schools that have an extra “merit” component. These schools see large white enrollment increases, but decreases in non-white enrollment. The reason for the racial differences isn’t clear.

Within three years of announcement of a Promise program, home prices rise an average of 7 to 12 percent compared to prices outside the promise area. Most of the increase occurs in homes that were already above the median-priced home. Since more expensive homes are more likely to be occupied by families with college-bound children, this makes sense.

Promise programs aren’t all that expensive compared to the cost of running a K-12 school. As of 2010, Kalamazoo Promise scholarships were averaging around $9,000 per student. So let me propose an interesting calculation. In most of the United States local schools are funded by local property taxes, and local property taxes are proportional to home values. If a Promise program raises home values 7~12 percent, that ought to raise school funding quite a bit. Might there be enough increased tax revenue to actually fund the Promise?